Japan to offer $690m in subsidies for next-generation geothermal power projects
Hot springs in Unzen, Nagasaki Prefecture, Japan (source: David Pursehouse / flickr, Creative Commons)
Carlo Cariaga
20 Apr 2026
Japan will be awarding $690 million in subsidies to support next-generation technologies for geothermal power generation, with a public tender expected soon.
The Ministry of Economy, Trade, and Industry (METI) of Japan has announced it will provide JPY 110.2 billion (approx. USD 691 million) in subsidies from 2026 to 2030 to support next-generation geothermal power generation projects.
Under the scheme, the government will cover up to 2/3 of the costs for survey and test drilling for eligible projects. The METI will begin soliciting applications for the funding by June 2026, towards a target of starting test drilling by 2030.
The subsidies will come from the JPY 2 trillion Green Innovation Fund, which supports decarbonization technologies. The aim for the fund is to support the goal of carbon neutrality by 2050.
As indicated by both METI and JOGMEC in 2025, the initiative supports three types of next-generation geothermal technologies:
- Enhanced geothermal systems
- Closed-loop geothermal systems
- Supercritical geothermal systems
While Japan has a long and rich history of geothermal development, suitable geothermal sites are often located in hot spring areas and national parks. This limits the size of geothermal projects, as due consideration needs to be applied to ensure the continuity of hot spring businesses.
Next-generation technologies are being explored by Japan with the aim of allowing for greater site selection flexibility and geothermal development even in unconventional locations.
Source: Nikkei and Asia News Network
